— Kishore V, SME and ACW at Edumarz.
Money Measurement Concept:
Only those transactions that can be described in terms of money are documented in the accounts, according to this approach.
Since money serves as the medium of exchange transactions are expressed in money are recorded and the ruling currency of a country is the measuring unit for accounting.
Transactions that do not involve money will not be recorded in the books of the account.
For example, working conditions in the workplace, strike the employees, efficiency of management, etc., will not be recorded in the books as they cannot be expressed in terms of money.
Going Concern Concept:
The basic assumption is that company will be affected and will continue to operate for the foreseeable future.
The Going Concern concept has an impact on accounting standards such as asset and liability assessment, fixed asset depreciation, outstanding and prepaid expenses, and accrued and unearned income treatment.
Assets, for example, are usually appraised at their historical cost. Any short-term rise or fall in the value of assets is neglected.